Tech stocks continue to appreciate regardless of any ebb and flow in the COVID-19 backdrop or the prospect of rising interest rates. Albeit there was a minor sell-off in late February as a function of rising interest rates that has been quickly erased. Tech underpins the stay-at-home economy and the so-called back-to-normal economy. And now more than ever, technology serves as an integral part of every slice of the economy. These stocks have remained strong despite the massive rotation into value stocks throughout 2021. Considering many of these names have appreciated since their February lows and breaking through their 52-week highs, these large-cap tech companies are priced for perfection heading into earnings. Stocks such as Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and the broader index Powershares (QQQ) have appreciated double digits over a two-week period as we head into earnings.
The Value Rotation and Roaring Tech
The market has witnessed a massive sea change as the large-scale vaccination efforts in the US is coming to fruition. The Dow Jones, S&P 500, and Nasdaq have rallied to all-time highs while recovery and value names have recaptured more of their lost market capitalization due to COVID-19. Meanwhile, many technology stocks that powered the market higher in the initial stages of this post-COVID-19 rally have stalled out early in 2021 to now rip higher as well. Once the value rotation began, many high-quality technology names fell from their highs and have traded sideways since their highs back in September. Now tech participation has been a major driver to propel the markets even higher and to even more lofty levels. Continue reading "Tech Earnings On Tap - Priced For Perfection?"
